Ash Maurya's Blog, page 5

What I Think About Your Idea Does Not Matter

I review lots of Lean Canvas business models in a week.

At the end of these review sessions,

I am often asked what I think of “the idea”.

What I think doesn’t matter.

I can, like the next guy,

take any position on your business model I choose

and defend it.

I can tell you that because

something similar has been done before in a different domain,

the idea is very promising.

I can just as easily make a case for the opposite.

What I (or anyone else) thinks at this stage

when anything is possible

does not matter.

Much as with science,

the hard part isn’t theory generation,

but validation of that theory through empirical testing.

My job isn’t to tell you whether your idea is good or bad.

But to drive focus on the right questions that need empirical answers

And to show you fast techniques for getting those answers.

You ultimately pose the question: “Is my idea any good?”

to your customers and market.

But there too you don’t simply ask the question,

but rather measure what they do.

To Create Art, You Have to Go to War With Yourself

You have to be your own worst critic.

You have to be willing to build something up,

and then take it down just as quickly

only to put up something better.

You have to be ruthless.

You have to add stuff

but then go over it with a fine tooth comb

to take out all the fluff.

You have to seek feedback.

You can’t build something great in isolation,

It has to be shown to others,

not for what they tell you, but what they do next.

Would You Prefer a Linear or Exponential Growth Rate?

Most people would probably rush to answer exponential,

which is the right answer, but most people don’t realize that

linear growth actually outpaces exponential growth at the early stages.

That’s when the hockey stick looks largely flat.

Try this exercise:

Would you rather get paid $2/hr forever or

$0.02/hr with a doubling pay rate at each completed hour?

If you draw out this table, you’ll see that you would be way better off

getting paid steadily for the first 11 hours.

But at the 12 hour, you would make almost twice as much using option 2.

Most people model their business growth linearly and think short term.

They think of short term tactics to get the next 2 or next 10 customers now.

An exponential thinker plays the long game.

They think strategically for how to get the next 2X or next 10X customers months from now.

Can you Experiment Your Way to Greatness?

I recently got asked the question:

Does Lean lead to breakthrough innovation?

Since a lot of Lean is built on the Scientific Method, this would be akin to asking:

Does the Scientific Method lead to breakthrough discovery?

We know the answer to the second question.

But a transitive argument is not enough to dismiss the first question.

A lot of scientific inquiry, like entrepreneurial inquiry, goes nowhere.

Both describe running experiments as a key activity,

but simply running experiments does NOT guarantee success.

With both, you have to start with big problems worth solving.

You then formulate your best possible theory

of what might work and build a model

that you then test through experiments.

Neither method guarantees results.

But both give you rigorous process for

validating or invalidating your model.

And put the ball again in your court for your next move.

Key Partners

Key Partners help us scale our message from one-to-many.

So it naturally follows to pursue them.

The question is when.

Too many entrepreneurs pursue partnerships too early

which is a form of waste.

Most partnerships them never work.

Yes, partners represent a broadcast channel but

they still have to protect their customer relationships which is built on trust.

They won’t spend their brand capital on an untested product.

Yes, partners typically have more established business models but

they still have to grow their business.

They won’t help you figure out your business model.

The worst is seeing 2 early stage startups partner up.

That’s like tying two stones together and seeing if it floats.

You almost always have to start with the end-customer before the key partner.

You have to figure out the value proposition and business model by demonstrating

traction – even at small scale.

Traction gives you leverage.

Leverage to attract partners.

Leverage to derisk your solution.

Leverage to show them what’s in it for them.

This is why I took out the “Key Partners” box in the Lean Canvas.

The original business model canvas placed too much emphasis on partnerships

which doesn’t just take up space, but worse,

it sends people down the wrong rabbit hole.

This is true even at large companies.

Try to get your sales force to sell your untested shiny new product.

They have commissions to earn and time is money.

If your own sales force won’t sell your product,

why would a key partner?

Instead of starting with key partners,

start by describing your end-customers on a Lean Canvas, and

put your “potential” key partners in the Channels box.

Once ready for partnerships,

create a new Lean Canvas with your key partner in the Customer Segment box, and

describe their problems, how your solution helps them, etc.

In others create an offer they can’t refuse.

Do You Hope Customers Buy Your Product

I watch the words entrepreneurs use.

I catch a lot of them using the word “hope”.

They launch their product and hope customers buy.

Other words commonly used are “alpha” or “beta” for their first release.

Not only do these labels come across as being apologetic,

they also signal a low quality product.

While one should generally be hopeful,

when it comes to spending time on a risky idea like a startup,

you have to be ruthless on testing.

Don’t give a half-baked beta product away and

hope customers will one day buy.

Instead build a small, but fully baked,

early-access product (MVP) and qualify your early adopters

based on who buys it.

Hemingway’s Hack

Recently it seems, a lot has been made about daily rituals.

There’s even a book on it.

Most daily rituals, however, focus on starting the day right

but it’s just as important to end the day right too.

Some of our best ideas come together in the recesses of our minds during sleep.

Here’s a priming hack I read about recently for doing just that:

===

Whenever Hemingway was about to start a new writing project,

he would start with a single sentence, often right before bed.

This was his way of priming his unconscious to do its thing during the night.

He would wake the next morning,

re-read what he wrote, and

have a new clarity of mission.

==

I use this technique not just for writing projects,

but any big project worth breaking down.

I’ll outline the next action the night before.

If it still makes sense in the morning,

it becomes my one thing to push forward that day.

Note:

It’s important to NOT try and solve the problem,

just start the work,

or you might have a hard time sleeping at all.

Are You Embarrassed by Your MVP?

“If you aren’t embarrassed by the first version of your product, you’ve launched too late.”

– Reid Hoffman, Founder of LinkedIn

A number of people replace the “first version of your product”

in the quote above with the word “MVP” which I think is a mistake.

This quote was applicable at a time when

we primarily employed a build-first strategy to launches.

We didn’t get outside the building.

We didn’t run customer interviews.

We didn’t know what customers “really” wanted.

We have gotten a lot better at all these things.

An MVP is not simply the “first version of your product”,

but the smallest solution you build that delivers and captures customer value.

Getting to the right MVP takes hundreds of hours of

customer testing.

But you end up with a problem worth solving,

paying early adopters versus feedback giving free loaders,

a first release that solves an immediate must-have problem,

which is the beginning of your journey towards product/market fit.

What’s to be embarrassed about that?

Best Practices Versus Practices That Work

Best practices are typically codified

after many thousands of hours of collective learning.

We rightly go looking for best practices to tap into this collective wisdom

but get disappointed when they don’t quite work as advertised.

We often miss that best practices are contextual.

What works after a thousand hours at scale

will not necessarily work at a 100 hours.

My favorite example is reducing signup friction.

Reducing signup friction makes complete sense at scale.

You’ve got a product that you know works.

Your battle is just getting people to experience it.

And you’re reasonably confident (backed by data)

that once people do, enough will convert.

At the early stages though, you need to do the exact opposite.

Making it too easy for people to try your product

drowns you in lots of feedback.

Worse, it attracts

customers and non-customers,

good customers and bad customers,

early adopters and mainstream adopters,

Each behave differently.

The result is not only lots of feedback,

but lots of conflicting feedback that you can’t easily tell apart.

Who do you listen too?

At the earliest stages,

you shouldn’t reduce signup friction, but increase it.

That way you qualify the right early adopters

with who you build the right product,

first for them, then the masses.

You can’t just adopt a scaled down version of a best practice.

You sometimes have to adopt the anti-best practice instead.

Growth Models

All businesses need to grow from zero to the goal.

The difference, of course, is the scale of the goal.

All business need to repeatedly double in size.

The difference, of course, is the timeframe.

Facebook went from 1 user to 1 billion users.

Doubling 30 times in 8 years.

Another business might go from 1 customer to 1,000 customers.

Doubling 10 times in 4 years.